Alright, let's get started. Once again, good morning and thank you for joining us. Earlier today, you might have caught our Q2 results in the press release issued this morning. We'll be walking you through those numbers today, but that's not all. We also have some exciting updates behind the scenes to share that we think you're really going to enjoy. Joining on the call today, you have myself, Nick Campbell, I'm Head of Investor Relations here at Adcore . You'll hear from Omri , Adcore CEO and Founder, and Amit Konforty, Adcore 's CFO. The agenda for today before we begin, we'll go over some forward-looking statements, followed by the CEO opening remarks, then the CFO financial highlights, and finally Q&A.
If you do have a question during this call, I encourage you to use the submit a question feature in Zoom, and that will be addressed at the end. Before we begin, just please be aware during this call we might make some forward-looking statements. These statements are uncertain in nature, so please take that into account. I'll give everyone about 30 seconds to review this before we move on.
Nick, maybe you want to share your screen?
That would be a good idea. Thank you, Omri. I thought it was shared.
That's why I'm the CEO, you know.
I'll give you guys another 30 seconds to review the forward-looking statements. Thanks, Omri.
Thank you.
Alright, very good. With that, I'm going to pass the mic to Omri, Adcore CEO and Founder. Omri, the floor is yours.
Great. Thank you very much, Nick, for introducing this admin call. Let me share my screen. Just one second. Great. Again, good morning, everyone. With pleasure, we're going to present today the company results for Q2 2025. Discuss, you know, obviously the results. I'm going to give the management highlights for today for the quarterly results. Amit is going to discuss the results in more details. Equally important, that's not something we do in every quarter. We would like to share with you some of the amazing level of innovation that we've been undergoing during this last quarter. A lot of it, if not almost all of it, is related to AI. I'm sure that you're going to love what we're about to present to you today, whether it's obviously the quarterly results, but also the innovations that we've been able to achieve this quarter.
Adcore delivered a very strong Q2 2025, higher gross profit, improved margins, positive adjusted EBITDA, 35% surge in APAC revenue. In a sense, all the important metrics during this quarter move in the right direction, especially if we compare them to previous quarters last year. A lot of the growth that we've been able to achieve in the improvement in gross margin, gross profit as well, is due to the adoption that we see with our Media Blast apps that come with high merging SaaS revenue and continued client growth throughout the region, mainly in the APAC and EMEA region as well. Let's dive a bit to the numbers. Top line revenue was CAD 6.5 million this quarter compared to CAD 6.6 million in the previous year. Quarters were mainly more or less remain flat.
Gross profit, however, improved 6% year -on -year, from CAD 2.9 million in Q2 2024 to CAD 3.1 million in Q2 2025. If we look at the quality gross KPIs, then we can see definitely gross margin improved to 47% in Q2 2025 compared to 44% in Q2 2024. Big improvement over there. Also, if we look at cash position, it grew by 23% year on year to CAD 9 million compared to CAD 7.3 million in the previous quarter last year. Again, cash position stronger, better gross margin, better gross profit, a lot of better adjusted EBITDA, of course, so a lot of, let's say, improvement during the last quarter. If I need to sum everything up, you know, the things that we loved or liked to see during the last quarter, then gross margin improved to 47% compared to 44% in the previous year.
Cash and cash equivalent grew by 23% to CAD 9 million in Q2 2025. Reduced net loss by only half, but we cut the net loss by almost half. It was CAD 425,000 in Q2 2025 compared to almost CAD 700,000 in Q2 2024. A big reduction in the company net loss. Positive adjusted EBITDA, actually, adjusted EBITDA improved by almost CAD 300,000. From a loss of CAD 173,000 in Q2 2024, we actually achieved a positive adjusted EBITDA of CAD 156,000 in Q2 2025. Gross profit grew by 6% year on year. APAC revenue grew by 35%. A lot of positive growth and momentum, especially, I would say, what we call, let's say, quality KPIs, you know, KPIs like gross profit, gross margin, adjusted EBITDA, cash position, all of them move in the right direction in Q2 2025.
If you remember in the beginning of the year, we discussed, you know, some of the company targets of what we aim to achieve in 2025. I want to run a quick check to see where we stand with this target. We discussed that ideally we'd like to see a scale in revenue to CAD 40 million this year. I know H1 was more or less flat if we look year on year, but bear in mind that Q3 and Q4 are the strongest quarters for us in the year, and we still have enough time to recover. It's not an ideal start of the year in terms of top line revenue, but we do see momentum building up already.
It's a bit early in the quarter, but in Q3, and we strongly believe that we still having like positive Q3 and positive Q4, we can still be at least near to the targets that we discussed. Strength and profitability, we said that we want to achieve a sixth straight quarter of positive adjusted EBITDA. Yet again, over here, big check, we did another positive quarter, which is great. AI-driven innovation, it's not a slogan for us. It's something we do now on a daily basis. Most of the innovation I'm about to reveal on today's earnings call is AI-related. There's a lot going on, trust me, and I'm sure that you're going to love what we're about to show you with regards to AI. Last but not least, growing SaaS recurrent revenue. We see that Media Blast is continuing to grow.
We had some challenges this quarter with regards to Microsoft Advertising account linking. We overcame these challenges, and even with these challenges, still Media Blast's average MRR grew by almost 10% quarter -on -quarter. I think we still see Media Blast contribute a lot of, you know, new value to the company and improving the different metrics as well. I would like to take a pause from discussing the quarterly result and quarterly numbers and talk about the future of Adcore. The future is that Adcore is very much integrated into AI. A lot of what we're doing, a lot of what we're building nowadays is built on the foundation of AI. I would like to present two new features that we're very proud of that we recently released into Proposaly.
Trust me, it wasn't an easy task to select which feature we would like to discuss today because there's so much innovation going on on Proposaly on a literally daily basis that we need to pick which functionality, which feature we would like to disclose. Eventually, we picked two that we think are going to contribute even more value to Proposaly than what the app already has to offer. The first one is the ability to easily generate proposals using a simple AI prompt. Instead of manually now going and start building the proposal, building the presentation of the proposal, and make sure that everything is ready, we can literally do it with AI in less than two minutes. When you click create a proposal now with Proposaly, you have an option to create it with AI.
You're going to need to enter your company website so we can scan the website and get all the information, also get the design and look and feel of your website and copy it to the presentation using AI. Equally important, creating all the content and everything that is related. Let's see a short demonstration of this new functionality in Proposaly.
I need this proposal sent to the client.
No problem. In your inbox, two minutes early.
Great. That was just like a sneak preview, but trust me, it's a game changer because, again, if now I'm a salesperson and all I need to do is to give a simple AI prompt to Proposaly, the system is already going to be able to generate a proposal for me. My life becomes much easier. I can create the correct proposal with no hassle. Basically, the entire sales process becomes much more efficient. That's, let's say, basically a big, big differentiator from other applications out there. Another cool feature that we would like to disclose today is the ability to send one-off payment requests via Proposaly. If you remember, Proposaly was built.
Proposaly's vision and mission was to streamline the entire sales workflow, make it more efficient, increase sales and revenue to X, and basically take a very complex, I would say, process, what we call traditional sales flow, and make it as simple and easy and accessible as possible. In a traditional sales flow, I would say it starts probably with a presentation, and then I would send the client a price quote. Maybe I would need to do some adjustment to this price quote. If he's happy with the quote, I need to send him an agreement to sign, and then I need to make payment, and then I need to update him on the project. Everything I just discussed now, in a typical company, requires a few apps, a few platforms. It's disconnected. It's not friendly. Proposaly resolves all of that. We send one link to the client.
You have the client portal, and everything is there on this portal: the presentation, the price quote, the add-ons, the ability to sign the agreement, to make the payment, to get the project updates, everything in one friendly place and looking like CAD 1 million . That was, let's say, Proposaly's mission. We say, okay, but what if the client just wants to send an agreement? I don't want to send the entire proposal. We say, okay, we create a new document type under Proposaly called an agreement, and it's only going to contain, let's say, the presentation, the agreement, the ability to interact within the client portal. That's an agreement document type. We say, what if it's not even an agreement? I just want to send a presentation because also presentation looks like CAD 1 million in Proposaly. We say, you know what? Let's create a new doc type.
We call it presentation. Now we say, what if I just want to get the one-off payment for my client? I don't need a fancy proposal. I don't need to sign a fancy agreement or anything like that, not even a presentation. Just send a payment request, maybe have the ability to add some add-ons, maybe like ask for a tip, for example, as an option, and that's it. Very simple. Go to Proposaly, set the amount, set a short description of what the payment is about, put the recipient email, click send, and that's it. Imagine I'm, I don't know, like a flower boutique shop in California. I get an order for a special bouquet over the phone.
Now, instead of me starting to take the client's credit card details or anything like that, which is not very secure or user-friendly, I can easily send him a custom payment request with add-ons, maybe with tip requests and stuff like that, straight to his phone. Let's see the next videos that basically show exactly this story.
Sure, I'll send you a special birthday bouquet for your dad. I love you, Dad.
I love you too, sweetie.
Very nice, and it comes with a big promising. Basically, nowadays, even let's say small businesses can send, let's say, Amazon-grade checkout, you know, like custom checkout to their clients without any issues. That's a big differentiation and a big game changer the way businesses are done nowadays. Basically, we bring e-commerce for traditional businesses, but do it in a customized way. It's not like we're not building a website for them. We're building a special link for them that is a special, let's say, payment request, special proposal, or whatever that is custom made for this specific client, but looks like CAD 1 million. That's a big, big value addition to our system. I want to share the presentation again. Sorry about that.
We discussed a bit new functionality that we added to Proposaly, and trust me, there's much more that's going on in Proposaly literally on a daily basis. Now I want to discuss what our AI is transforming our creative studio. Basically, before AI, creating, let's say, commercial-grade video for us was almost mission impossible. If it was possible, we need to spend so much money and, you know, do the video production. A lot of people involved, very costly, and it's like maybe CAD 50,000, CAD 100,000, you know, just to create one video like that. It was very difficult to do. Now with AI, our creative studio can create TV commercial-grade videos, but basically do it in less than one day. It looks like CAD 1 million. Trust me, we're going to show you like two videos.
One created for our client, GRB in Australia, which is a kitchen warehouse e-com company. Another one was created to the Jewish agency, part of a tender that we are currently taking in Israel. Basically, two videos, and both of them generated by AI. By the way, the two videos that I show you to Proposaly also created with AI, and that took us less than one day to create them. Basically, again, that's the mind-blowing what we can do today with AI, and this is just yet another cool example.
There's a reason I come back here every day, not just to cook, but to create.
This is one video again, you know, like probably, like I said, like commercial TV, commercial-grade type of video. It can be on any national TV. It was created with AI in less than eight hours. It's a mind-blowing and game-changing moment for us. The same video, different concept, you know, generated with AI for the Jewish agency.
Back home, I had to keep it quiet. Now, I fly it loud and proud.
Wild. Walking down the street and everyone's just like me.
Back in Sydney, I'd be looking over my shoulder. Here, I'm sweet as.
The little ones can just run free here like we used to.
I'm coming home. I'm coming home. Tell the world I'm coming home.
Cool. I think like I'm sure that you love what we are, what we showed you today. That's also a demonstration that in Adcore, we don't just talk AI. We do AI. We integrate AI. We implement AI. That's already transforming the way that we are doing business, whether we are more efficient. You can already see it in the numbers, let's say, whether it's, you know, like we are getting new clients because of our AI abilities, whether it's the level of innovation we can introduce to Proposaly, for example. For us, AI is not just, let's say, a slogan or a trend. It's something that is already happening and transforming the way we're doing business. That was important for us to share it with the audience today. Last but not least, I'd like to conclude the management remarks with discussing the share stock price.
Currently, it sits on CAD 0.26. If looking at comparable companies, we see a massive upside of almost 800%. If we look at EBIT to gross profit or even EBIT to EBITDA, a massive upside of more than 50%. Again, management still believes there's a disconnection where the stock price is currently sitting and where the company true valuation should be. We are working very hard every day, every week, every month, every quarter to make Adcore the best and most innovative company out there. I think eventually, stock price will catch up and basically Adcore will become the success story it deserves to be. With that, I want to conclude my today's remarks and add it back to Amit, I guess.
Thank you and good morning, everyone. Before beginning the financial overview, I would like to remind you that the following discussion will include GAAP financial measures as well as non-GAAP results. All amounts will be presented in Canadian dollars. In the second quarter of 2025, we saw increases in both gross profitability and gross margins. Our APAC revenue grew by 35%, reflecting strong regional performance, and our cash position rose by 23% compared to June 30, 2024. Let's review in more detail. For the three months ended June 30, 2025, we delivered revenue of CAD 6.5 million compared to CAD 6.6 million in the same period of 2024, a decrease of CAD 0.1 million or 1%. Gross profit for the three months ended June 30, 2025 was CAD 3.1 million compared to CAD 2.9 million in the prior year, an increase of CAD 0.2 million or 6%.
Gross margins for the three months ended June 30, 2025 were 47% compared to 44% in the same period last year. As for operational expenses, R&D expenses for the quarter were CAD 0.5 million compared to CAD 0.6 million in the prior year. SG&A expenses for the quarter were CAD 3.1 million compared to CAD 3.1 million in the prior year. Operating loss for the three months ended June 30, 2025 was CAD 0.5 million compared to CAD 0.8 million in the same period last year, a decrease of CAD 0.3 million or 40%, mainly due to improvement in gross profits. Net loss for the three months ended June 30, 2025 was CAD 0.4 million compared to CAD 0.7 million in the same period last year, a decrease of CAD 0.3 million or 38%. Revenues and gross profit. Looking at the quarterly results, revenues saw a slight decrease, while both gross profit and gross margins improved meaningfully.
For the first half of the year, we achieved growth in both revenues and gross profit, which is positioning us well to maintain the positive trend for the year that you see on the right. As for geographical revenue breakdown, revenue in APAC saw a significant 35% year-over-year increase, which is driven primarily by the acquiring of new clients. Revenue in EMEA decreased by 6% and in North America by 43%, mainly due to stopped or reduced activities. In terms of financial position, we had cash and cash equivalent of CAD 9 million as of June 30, 2025, compared to CAD 10.8 million at December 31st, 2024. Cash and cash equivalent as of June 30, 2024, were CAD 7.3 million, showing an increase of 23% year over year. Total working capital amounted to CAD 6.3 million compared to CAD 7.3 million at December 31st, 2024, a decrease of CAD 1 million or 14%.
As for the liability sides of the financial position, we can see that the company is still debt-free. Adjusted EBITDA. The quarterly non-GAAP results reflect adjustments for the following items: depreciation and amortization, share-based payment, and other non-operational items. For the three months ended June 30, 2025, adjusted EBITDA was CAD 156,000 compared to a - CAD 173,000 for the same period in 2024. This increase in profitability is primarily driven by a reduction in operational losses. With that, I will turn the call back to Nick.
Thank you very much, Amit. At this time, we will move over to the Q&A session where we have a number of submitted questions. We'll begin with APAC, which saw again another strong quarter with around 35% growth. You know, can we expect this to continue and what's really working for you in that region?
It's a good question, and we're definitely happy from the result and the performance that we see in this specific region. I would say first, for what is working for us in this region, it's a mix of new client acquisition. We've been able to acquire some very nice clients in this specific region that obviously contribute to the results that we see coming from this quarter, as well as performance or increasing SaaS revenue from our Media Blast app that is directly related, you know, or contribute within this specific region. I think it's a combination between SaaS revenue that are growing for us and new client acquisition. We expect the positive trend in this specific region to continue throughout 2025.
Very good. Q2 gross margins were at 47%. That's relatively high when looking at previous quarters. Can you elaborate on how you were able to achieve this and if that's sustainable?
Indeed. Maybe Amit, you would like to cover this one?
Yeah, sure. Basically, part of the increase in our gross margin this quarter is due to an increase in our SaaS revenues and also improved efficiency that we presented partially by implementing artificial intelligence. This is the reason.
Thank you, Amit. Next question is, is Adcore able to leverage some of the new AI tools coming out, particularly, you know, there's Google AI Max? Can we use this to monetize it and gain market share?
It's a good question. I would maybe start by quoting what Google is saying in its latest earnings call. There was a lot of, let's say, concern regarding AI impacting Google business models, for example. Google actually said that it looked at it as a moment of big expansion. We believe, we truly believe that's the case. This represents a massive opportunity for us. Adcore, being an innovative technology company, basically is poised to lead this trend as well. It's not a trend. That's a revolution. We would like and want to be part of this AI revolution. Google recently held a very big event in APAC, and Adcore was presented to be the poster boy, I would say, for implementing Google new AI Max campaign technology, which is an AI-based campaign for search that Google literally introduced.
We did a big case study presenting the result of this tool in front of our clients, a candle folks. That shows you how Adcore basically is in the front row of this massive transformation. I think that being able to be there also helps us to attract new clients, new businesses. People look at Adcore as an innovative company, any company that you would like to be part of, partner with in order to benefit from all this AI boom.
Thank you, Omri. Similarly, you know, AI is having a huge impact on many industries. Does Adcore have a plan on how we are going to use AI to increase our revenue and reduce costs?
I think for Adcore, I believe we already proved it during this earnings call and during the presentation. AI is not a slogan. It's a way of life, and it's already deeply integrated with everything we do, more or less, whether it's our technology or the way we operate and run business. You can already see it in the results, like Amit rightly mentioned before. Some of the improvements that we see in efficiency are because of AI. We can get more work done faster, easier, with less people sometimes, and that's a game changer. When we talk about technology and talk about innovation, the sky is the limit. You saw how easily it's now, let's say, to create a proposal using AI, for example, never been able before.
Getting a TV, like great commercial in less than eight hours or a day work time, so I don't know what all the Hollywood studios are going to do now, but they need to be careful of the Adcore AI studio nowadays. I think, again, AI is here already. It's already the way we're doing business for better, and it's going to have even more positive effects as we move along, next quarter, next year. It's definitely a big, big game changer for better for us.
Yeah, I agree, Omri, it's quite incredible what you could do with AI in those videos in less than eight hours. It's quite amazing. Moving on to the next question here, LinkedIn has your employee count at 95 people. That's about a 25% growth increase over the previous year. Is that an accurate figure?
Yes and no. I believe the more accurate number, and that's including both direct employees and non-direct employees around me, more accurate is 75, I think. Amit, correct me if I'm wrong.
Yeah, that's correct.
Okay, so I believe that LinkedIn is probably, you know, some of it related to legacy, maybe employees and people that will maybe have enough time, you know, to disconnect from Adcore. I'm not sure 95, it's a bit exaggerated. What is true is that Adcore is growing in the number of employees. If you need to look at the same number last year, probably the headcount were around 65%, 63%. Having said that, we took a very different strategy in 2025 than we took in the previous year. Most of the growing that we see nowadays coming from specific regions or countries that come with relatively low salaries. We're growing a lot of our team in Vietnam. We started to grow our team in South America, for example, in Argentina.
These people come in, I would say, one third or one quarter of the cost that basically it costs us to get somebody on record employing, let's say, in Australia or in Canada or in Israel. It's a big game changer. We are growing the team, but not growing actually the salaries expenses. Amit, like, correct me if I'm wrong, but I don't believe there's like a big growth, if any, in salary expenses Q2 this year compared to previous year.
Yeah, that's correct.
Okay, I think that's just the early sign of this transformation that we are undergoing. Trust me, maybe these people come relatively in less cost, but by no means, you know, lesser of employees. This is like grade A employees that we can get, like, including developers in these specific countries. Basically, that's going to be transforming the way we can do business and our salary costs moving forward. The idea is, yeah, to grow the headcount if needed, but growing in countries that are not going to cost us as much, let's say, as people in Australia, people in the U.S., people in Israel.
Very good. Thank you, Omri. I guess on that note, does Adcore have any plans to open up a new office, perhaps in South America?
I think the short answer, not now, not as I know of at least, because to be honest, it's not needed. Part of our ability to reduce costs is, we can employ someone in Argentina as a contractor working fully remotely without having an office cost associated with it, and we can still get the work done. I think currently we're fine with our current offices, branches. If you're going to employ somebody, we don't need that. We don't need to run and open a new branch in Argentina or Vietnam or anything like that.
Thank you, Omri. In the press release, you discussed some new features on Proposaly. I'm interested. Do you have an expected go live date for the app, and how is the beta testing going?
Okay, so actually beta testing is live, right? Proposaly is working and we do have an active beta client. I think it's a transformational moment for the application, you know, going to beta or closed beta stage is a very important and critical stage in the app lifecycle. It helps us to better understand the market fit, if we still have some gaps between the current functionality that the app can support and the actual needs of, let's say, our real clients. We did find out that we have some gaps. We are narrowing them as we speak. Basically, that's a big change. Also, the shift of focus is happening, shifting from pure R&D to, let's say, more business side of the application, whether it's client acquisition, onboarding teams, or client success team.
I think we're gradually now shifting focus from just pure product-related R&D focus to more business side of the application and the activity. I think that's an important step moving forward and a critical step in order for Proposaly to be the success story we're all working very hard for it to be.
Very good. Thank you, Omri. I believe that concludes all the questions we had for today. At this time, we'll move over to thank you, Amit and Omri, for your notes today. Thank you for joining the call. I want to give Omri the last moment here to end our end off the call.
Okay, with pleasure. Again, thanks for everybody that joined today's call. I think it was an interesting call. It wasn't the usual typical call. From one end, we had a strong quarter, a positive quarter with all the quality indicators moving in the right direction. Also, bear in mind Q2, Q1 for us are not the most important quarters of the year. We still have, let's say, the peak of the year in front of us, whether it's Q3, Q4. It was an interesting earnings call because we've been able to showcase our AI transformation transforming Adcore and what we can achieve, what type of innovation level we can achieve now with AI. This is an eye-opening moment for us as a company, for shareholders to understand this is the future and the future is already here. Adcore is part of this future. I think it's very promising.
We look at the next quarter, the next year, very optimistic.
Thank you, Omri. Very exciting indeed. As you mentioned, the future is now. Quite exciting. That's it for today. Thank you all for joining and have a great rest of your day.
Thank you.